PAMADA proposes additional tax to counter ‘Own Money’

APMDA rejects suggestion, calls it an additional burden on customers

While the customers of new vehicles are facing the hectic process of delayed supply despite paying the price in advance, they pay Own Money or premium to dealers to get the vehicle delivered in time. To curb the menace of premium, Pakistan Automobile Assemblers Dealer Association (PAMADA) has suggested that the government must introduce an additional registration tax in case of transfer of new car within 3 months of purchase.

However, according to All Pakistan Motor Dealers Association (APMDA), the proposed tax will be an additional burden on the people, who are already fed up with the business practices of assemblers and dealers of new cars in the country.

PAMADA Chairman Iqbal Shah in a statement said the prompt delivery demands by customers encouraged the investors to exploit customers by offering vehicles on premium payments and if customers booked their vehicles and secured delivery as per the schedule offered by companies, no premium would exist.

According to him, vehicles were manufactured against individual orders of the customers and the industry has taken various steps towards discouraging premiums such as refusing multiple bookings of vehicles on a single CNIC, displaying vehicle availability information at the dealership floors and on the company website.  He said customers should book their vehicles only at the authorised dealerships and wait for delivery of their vehicles as per the delivery date. He added that with customers’ support, the menace of premiums on car prices can be eliminated.

He said that OEMs discourage premiums and have run consumer education campaigns various times through advertisements and have made available the vehicle availability information on their website, but a demand for immediate delivery from customers against actual delivery time continues to encourage investors to charge own money.

He also mentioned that due to government’s efforts to improve the economy and the stimulus in the market from the China Pakistan Economic Corridor (CPEC), domestically manufactured vehicles are in high demand. “Lead times on vehicle delivery arise whenever there is high demand and are a common phenomenon across the globe”, he said, referring to a 6 month waiting period on certain Suzuki variants in India.

Iqbal added that “presently all automakers are operating at full capacity and resorting to production overtimes to meet demand, besides working on increasing their capacity.

However, rejecting the suggestion of PAMADA, APMDA Chairman HM Shehzad said that the assemblers, instead of dealing with the premium by themselves, are trying to burden the customer and forcing them to pay additional taxes. PAMADA, according to Shehzad, actually serves the interests of assemblers. Assemblers, he alleged, were not only pocketing huge interests on prices of vehicles received in advance for over six months, but also getting a share in the business of premium. He alleged that 80 percent of the vehicles were presently booked by investors involved in getting premium, which according to him is actually black marketing. The crisis-stricken people were forced to pay over Rs 0.3 million and Rs 0.25 million premium for getting a Honda and Corolla respectively from the dealers.

“PAMADA on the behest of assemblers are trying to deceive people and government,” he said appealing the government to make a committee of National Assembly or Senate to investigate who booked vehicles at the manufacturers/assemblers of vehicles in the country. “The matter is needed to be investigated as people are fed up with the process purchasing a new car, going through the hectic system of booking,” he said adding the Auto Industry Policy 2016-2021 is not producing desired result due to the monopoly and blackmailing of assemblers and their dealers in the country.